The Lexington Fayette Urban County Government is currently developing a plan to transfer multiple properties from public to private ownership. Some properties, the Morton House and ArtsPlace, are already in a process of negotiation between the tenants and the city. Is this all bad news for the historic properties under consideration for transfer?
As Central Kentucky’s leading nonprofit preservation advocate, the Blue Grass Trust for Historic Preservation has received comments of concern regarding this offloading. The Trust is deeply committed to protecting these historic structures. As LFUCG continues the process of considering the disposition of its historic structures, the Blue Grass Trust supports the city’s proposed plan of imposing enforceable covenants and easements to ensure the properties are appropriately maintained and preserved. Easements have been mentioned by the city in previous meetings on the subject and LFUCG’s Office of Historic Preservation will be involved in the process.
So what are easements and restrictive covenants, and how will they ensure historic properties integral to the history and culture of Lexington are well-maintained in the future and protected from demolition?
Preservation easements and restrictive covenants are voluntary legal agreements. They are detailed, filed of record with the property’s chain of title and “run with the land.” Historic preservation easements and restrictive covenants are perpetual, and place specific restrictions on changes to or development of a historic property. Significant and character-defining features, or areas that are connected to a significant part of the property’s history, are repaired and maintained according to stipulations in the easement or restrictive covenant, often based on the Secretary of the Interior Standards guidelines for historic properties. Only the exterior of the property is typically regulated under the easement or restrictive covenant.
How does this work? The restrictions are held by qualified organizations, such as LFUCG and the Blue Grass Trust. These organizations are named in the body of the easement or restrictive covenant as the party with standing to manage and enforce the restrictions provided in the easement or the restrictive covenant. Because the restrictions “run with the land,” future owners, in addition to the current owner who initiated the process, are bound by the restrictions. In return, the owner of the property who initially grants the restrictions may receive federal and state tax benefits pending certain qualifying factors.
What happens when the owner decides to sell the property? All prospective buyers are on notice of the restrictions through the chain of title and thus the consequences of violations. The new owner will inherit the tax benefits. If the named party in the restrictions, such as LFUCG, has a “right of first refusal” under the terms of the restrictions, the holder has the first right to purchase the property when an acceptable offer of purchase is received.
As an added layer of protection, the Trust will offer itself as an easement holder for each historic property LFUCG brings to the table for future sale, should Council adopt the idea as proposed. Furthermore, the BGT will remain in close contact with LFUCG’s Office of Historic Preservation to review the drafting of easements or restrictive covenants and to monitor their enforcement. Finally, the Trust will also recommend that LFUCG maintain a right of first refusal for future property transfers.
The Blue Grass Trust for Historic Preservation is a non-profit advocate for historic preservation that strives to protect, revitalize, and promote the special historic places in our community to enhance the quality of life for future generations. We are committed to protecting all historic properties owned by LFUCG during this transition.
Brittany Sams is the Historic Preservation Specialist for the Blue Grass Trust for Historic Preservation, the region’s leading non profit preservation advocate.